Correlation Between Eva Airways and Chaheng Precision
Can any of the company-specific risk be diversified away by investing in both Eva Airways and Chaheng Precision at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Eva Airways and Chaheng Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eva Airways Corp and Chaheng Precision Co, you can compare the effects of market volatilities on Eva Airways and Chaheng Precision and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Eva Airways with a short position of Chaheng Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eva Airways and Chaheng Precision.
Diversification Opportunities for Eva Airways and Chaheng Precision
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eva and Chaheng is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Eva Airways Corp and Chaheng Precision Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chaheng Precision and Eva Airways is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Eva Airways Corp are associated (or correlated) with Chaheng Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chaheng Precision has no effect on the direction of Eva Airways i.e., Eva Airways and Chaheng Precision go up and down completely randomly.
Pair Corralation between Eva Airways and Chaheng Precision
Assuming the 90 days trading horizon Eva Airways Corp is expected to generate 1.4 times more return on investment than Chaheng Precision. However, Eva Airways is 1.4 times more volatile than Chaheng Precision Co. It trades about 0.1 of its potential returns per unit of risk. Chaheng Precision Co is currently generating about -0.25 per unit of risk. If you would invest 4,435 in Eva Airways Corp on December 11, 2024 and sell it today you would earn a total of 90.00 from holding Eva Airways Corp or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eva Airways Corp vs. Chaheng Precision Co
Performance |
| Timeline |
| Eva Airways Corp |
| Chaheng Precision |
Eva Airways and Chaheng Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eva Airways and Chaheng Precision
The main advantage of trading using opposite Eva Airways and Chaheng Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eva Airways position performs unexpectedly, Chaheng Precision can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Chaheng Precision will offset losses from the drop in Chaheng Precision's long position.| Eva Airways vs. China Airlines | Eva Airways vs. Evergreen Marine Corp | Eva Airways vs. Yang Ming Marine | Eva Airways vs. China Steel Corp |
| Chaheng Precision vs. Aerospace Industrial Development | Chaheng Precision vs. Unique Optical Industrial | Chaheng Precision vs. Energenesis Biomedical Co | Chaheng Precision vs. OFCO Industrial |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stocks Directory module to find actively traded stocks across global markets.
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